Mason County PUD halts bitcoin mining operations

Mason County Public Utility District No. 3 has enacted an open-ended moratorium on cryptocurrency operations, the most well-known of which is bitcoin mining. The Pacific Northwest has seen a rush of cryptocurrency operations enter the market.(Photo: Arla Shephard Bull / Mason County Life)

Mason County Public Utility District No. 3 hit pause on bitcoin mining operations earlier this month, when the utility placed a moratorium on the high-energy users coming onto the system.

District commissioners enacted an open-ended moratorium on April 10 on any applicant pursuing cryptocurrency operations, including cryptocurrency mining, the most common of which is bitcoin mining.

“We won’t take applications for new services, as we’ve had some large companies that want to come in,” said PUD No. 3 General Manager Annette Creekpaum. “It’s a high-density load that uses lots of electricity. We need to do some studying and figure out how to charge for it.”

Bitcoin, the first and most famous type of digital currency, was created in 2009.

Rather than a country or a bank issuing the currency, bitcoin is “mined” by users with special software. Every time bitcoin is sent to someone, the transaction is recorded in a “block.” Miners compete with one another to convert the blocks into sequences of code, known as “hash.”

When a new hash is generated, the miner receives 12.5 bitcoins, which, as of February 2018, was worth about $100,000.

The entire process involves a lot of energy, as miners work to process data as fast as possible to beat other miners, maximizing the stockpile of bitcoins they can get.

“A large grocery store or hospital uses between 30 and 40 kilowatt-hours per square foot,” said Michele Patterson, PUD No. 3 power supply manager. “Computer data processing can use over 2,100 kilowatt-hours per square foot.”

The Pacific Northwest has seen a rush of cryptocurrency operations enter the market, as the region’s affordable electricity rates and high-speed fiber optic networks appeal to miners, Patterson said.

Last month, Chelan County Public Utility District enacted a moratorium on cryptocurrency mining, followed suit by city councils throughout Eastern Washington — including Wenatchee, Leavenworth and Entiat — passing zoning controls or moratoriums on the operations.

Other utility districts, such as those in Grays Harbor or Cowlitz counties, are used to large industrial companies using the electricity load, so a cryptocurrency operation might not affect them, Creekpaum said.

“We were never a large industrial area, so we don’t have the capacity,” she said. “We’ve contracted with a third party, EES Consulting, for a cost of service study and will see what that brings back to us about what kind of power needs we have.”

The utility district wants to be sure that the electricity supply isn’t eroded for its other customers, but it also wants to ensure that it’s aware of what customers are doing, said PUD No. 3 public information manager Joel Myer.

“Some cryptocurrency operations have seen people move into houses or small commercial spaces without letting the utility know what they’re doing,” he said. “The system can then quickly get overloaded, causing power outages or transformer explosions.”